**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-Q**





x
            Quarterly
                Report pursuant to Section 13 or 15 (d) of the Securities Exchange
                Act of
                1934 for the quarterly period ended March 31,
                2006  o
            Transition Report pursuant to Section
              13 or
              15(d) of the Securities Exchange Act of 1934 for the transition period
              from _____ to _____




Commission
      file number: 000-30805





**WGNB****CORP.**


(Exact
      name of registrant as specified in its charter)


Georgia
              (State
                of Incorporation)
            58-1640130
              (I.R.S.
                Employer Identification No.)




201
      Maple
      Street


P.O.
      Box
      280


Carrollton,
      Georgia 30112


(Address
      of principal executive offices)





(770)
      832-3557


(Registrant’s
      telephone number, including area code)





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. Yes ý No  ̈





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, or a non-accelerated filer. See definition of “accelerated
      filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check
      one).





Large
                  Accelerated filer  ̈
              Accelerated
                  filer  ̈
              Non-accelerated
                  filer ý





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes  ̈ No ý





Indicate
      the number of shares outstanding of each of the issuer’s classes of common
      stock, as of the latest practicable date:





Class
              
              Common
                Stock, $1.25 par value
            Outstanding
                at May 10, 2006
              
              3,332,070











**WGNB
      CORP.**





**INDEX
      TO FORM 10-Q**





**Item
                Number**
              **in
                Form 10-Q**
            
            **Description**
            
            **Page****Part
                One**
            
            **Financial
                Information**Item
                1.
            
            Financial
                StatementsConsolidated
                Balance Sheets as of March 31, 2006 and December 31, 2005
            
            2Consolidated
                Statements of Earnings for the Three Months ended March 31, 2006
                and March
                31, 2005
            
            3Consolidated
                Statements of Comprehensive Income for the Three Months ended March
                31,
                2006 and March 31, 2005
            
            4Consolidated
                Statements of Cash Flows for the Three Months endedMarch
                31, 2006 and March 31, 2005
            
            5Notes
                to Consolidated Financial Statements
            
            7Item
                2.
            
            Management’s
                Discussion and Analysis of Financial Condition and Results of
                Operations
            
            10Item
                3.
            
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            15Item
                4.
            
            Controls
                and Procedures
            
            15**Part
                Two**
            
            **Other
                Information**Item
                1.
            
            Legal
                Proceedings
            
            16Item
                1A.
            
            Risk
                Factors
            
            16Item
                2.
            
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            
            16Item
                3.
            
            Defaults
                Upon Senior Securities
            
            16Item
                4.
            
            Submission
                of Matters to a Vote of Security Holders
            
            17Item
                5.
            
            Other
                Information
            
            17Item
                6.
            
            Exhibits
            
            17Signatures
            
            18








**Part
      I - Financial Information**





**Item
      1.**   **Financial
      Statements**





The
      unaudited financial statements of WGNB Corp. (the “Company”) are set forth on
      the following pages. All adjustments have been made which, in the opinion of
      management, are necessary in order to make the financial statements not
      misleading.




1


**WGNB
      CORP.**


**Consolidated
      Balance Sheets**





**As
      of March 31, 2006 and December 31, 2005**




Assets
            
            March 31,
            
            December
                31,2006
              (unaudited)
            
            2005
              (audited)Cash
                and cash due from banks
            
            $
            18,437,841
            
            
            10,673,541Federal
                funds sold
            
            
            18,231,259
            
            
            5,548,348Cash
                and cash equivalents
            
            
            36,669,100
            
            
            16,221,889Securities
                available for sale
            
            
            60,117,089
            
            
            64,359,833Securities
                held to maturity, estimated fair valuesof
                $7,188,000 and $6,840,000
            
            
            7,188,478
            
            
            6,736,552Loans,
                net
            
            
            423,872,338
            
            
            417,551,614Premises
                and equipment, net
            
            
            9,197,327
            
            
            9,134,245Accrued
                interest receivable
            
            
            3,061,905
            
            
            2,881,206Other
                assets
            
            
            7,509,112
            
            
            6,758,048$
            547,615,349
            
            
            523,643,387Liabilities
                and Stockholders’ EquityDeposits:Demand
            
            $
            52,215,531
            
            
            48,178,654Interest
                bearing demand
            
            
            157,724,704
            
            
            156,804,968Savings
            
            
            12,580,951
            
            
            12,160,203Time
            
            
            104,955,740
            
            
            100,065,972Time,
                over $100,000
            
            
            113,913,555
            
            
            111,839,648Total
                deposits
            
            
            441,390,481
            
            
            429,049,445Federal
                Home Loan Bank advances
            
            
            52,000,000
            
            
            42,000,000Accrued
                interest payable
            
            
            2,252,906
            
            
            2,133,858Other
                liabilities
            
            
            3,314,714
            
            
            2,508,051Total
                liabilities
            
            
            498,958,101
            
            
            475,691,354Commitments
                and contingenciesStockholders’
                equity:Common
                stock, $1.25 par value, 10,000,000 shares authorized;3,332,070
                and 3,325,196 shares issued and outstanding
            
            
            4,165,088
            
            
            4,156,495Additional
                paid-in capital
            
            
            4,620,111
            
            
            4,881,728Retained
                earnings
            
            
            39,753,347
            
            
            38,787,699Accumulated
                other comprehensive income
            
            
            118,702
            
            
            126,111Total
                stockholders’ equity
            
            
            48,657,248
            
            
            47,952,033$
            547,615,349
            
            
            523,643,387





*See
      accompanying notes to unaudited consolidated financial
      statements.*




2


**WGNB
      CORP.**


**Consolidated
      Statements of Earnings**





**For
      the Three Months Ended March 31, 2006 and 2005**


**(unaudited)**




2006
            
            2005Interest
                income:Interest
                and fees on loans
            
            $
            8,403,558
            
            
            6,178,634Interest
                on federal funds sold
            
            
            111,440
            
            
            51,311Interest
                on investment securities:U.S.
                Government agencies
            
            
            292,802
            
            
            255,706State,
                county and municipal
            
            
            365,377
            
            
            412,464Other
            
            
            291,101
            
            
            176,844Total
                interest income
            
            
            9,464,278
            
            
            7,074,959Interest
                expense:Interest
                on deposits:Demand
            
            
            1,153,234
            
            
            505,920Savings
            
            
            43,601
            
            
            14,879Time
            
            
            2,210,695
            
            
            1,273,884Interest
                on FHLB and other borrowings
            
            
            624,914
            
            
            576,873Total
                interest expense
            
            
            4,032,444
            
            
            2,371,556Net
                interest income
            
            
            5,431,834
            
            
            4,703,403Provision
                for loan losses
            
            
            300,000
            
            
            300,000Net
                interest income after provisionfor
                loan losses
            
            
            5,131,834
            
            
            4,403,403Other
                income:Service
                charges on deposit accounts
            
            
            976,813
            
            
            929,454Mortgage
                origination fees
            
            
            87,335
            
            
            72,506Miscellaneous
            
            
            363,896
            
            
            351,434Total
                other income
            
            
            1,428,044
            
            
            1,353,394Other
                expenses:Salaries
                and employee benefits
            
            
            2,362,251
            
            
            2,099,271Occupancy
            
            
            557,137
            
            
            543,081Other
                operating
            
            
            977,876
            
            
            879,731Total
                other expenses
            
            
            3,897,264
            
            
            3,522,083Earnings
                before income taxes
            
            
            2,662,614
            
            
            2,234,714Income
                taxes
            
            
            847,498
            
            
            620,743Net
                earnings
            
            $
            1,815,116
            
            
            1,613,971Basic
                earnings per share
            
            $
            .55
            
            
            .49Diluted
                earnings per share
            
            $
            .54
            
            
            .48Dividends
                declared per share
            
            $
            0.2550
            
            
            0.2150





*See
      accompanying notes to unaudited consolidated financial
      statements.*




3


**WGNB
      CORP.**


**Consolidated
      Statements of Comprehensive Income**





**For
      the Three Months Ended March 31, 2006 and 2005**


**(unaudited)**





2006
            
            2005Net
                earnings
            
            $
            1,815,116
            
            
            1,613,971Other
                comprehensive income (loss), net of tax:Unrealized
                (losses) on investmentsecurities
                available for sale:Unrealized
                (losses) arising duringthe
                period
            
            
            (11,226
            )
            
            (661,455
            )Associated
                taxes
            
            
            3,817
            
            
            224,895Other
                comprehensive income (loss)
            
            
            (7,409
            )
            
            (436,560
            )Comprehensive
                income
            
            $
            1,807,707
            
            
            1,177,411




4




**WGNB
      CORP.**


**Consolidated
      Statements of Cash Flows**





**For
      the Three Months Ended March 31, 2006 and 2005**


**(unaudited)**




2006
            
            2005Cash
                flows from operating activities:Net
                earnings
            
            $
            1,815,116
            
            
            1,613,971Adjustments
                to reconcile net earnings to net cashprovided
                by operating activities:Depreciation,
                amortization and accretion
            
            
            230,890
            
            
            257,046Provision
                for loan losses
            
            
            300,000
            
            
            300,000Loss/(gain)
                on sale of premises and equipment
            
            
            1,276
            
            
            (140
            )Stock-based
                employee compensation expense
            
            
            31,500
            
            
            -Loss
                on sale of other real estate owned
            
            
            -
            
            
            5,972Change
                in:Other
                assets
            
            
            (1,228,671
            )
            
            228,216Other
                liabilities
            
            
            577,303
            
            
            (140,900
            )Net
                cash provided by operating activities
            
            
            1,727,414
            
            
            2,264,165Cash
                flows from investing activities:Proceeds
                from maturities of securities available for sale
            
            
            10,192,391
            
            
            3,497,795Proceeds
                from maturities of securities held to maturity
            
            
            48,316
            
            
            -Purchases
                of securities available for sale
            
            
            (5,920,290
            )
            
            (4,898,049
            )Purchases
                of securities held to maturity
            
            
            (500,000
            )
            
            (244,936
            )Net
                change in loans
            
            
            (6,620,724
            )
            
            (21,447,838
            )Purchases
                of premises and equipment
            
            
            (336,072
            )
            
            (1,108,038
            )Proceeds
                from the sale of premises and equipment
            
            
            -
            
            
            140Proceeds
                from the sale of other real estate owned
            
            
            619,177
            
            
            39,028Net
                cash used by investing activities
            
            
            (2,517,202
            )
            
            (24,161,898
            )Cash
                flows from financing activities:Net
                change in deposits
            
            
            12,341,036
            
            
            36,898,945Proceeds
                from Federal Home Loan Bank borrowings
            
            
            10,000,000
            
            
            -Repayment
                of Federal Home Loan Bank borrowings
            
            
            -
            
            
            (3,000,000
            )Dividends
                paid
            
            
            (819,513
            )
            
            (682,318
            )Proceeds
                from exercise of stock options
            
            
            18,519
            
            
            -Purchase
                and retirement of common stock
            
            
            (303,043
            )
            
            (52,346
            )Net
                cash provided by financing activities
            
            
            21,236,999
            
            
            33,164,281Change
                in cash and cash equivalents
            
            
            20,447,211
            
            
            11,266,548Cash
                and cash equivalents at beginning of period
            
            
            16,221,889
            
            
            8,056,243Cash
                and cash equivalents at end of period
            
            $
            36,669,100
            
            
            19,322,791




*See
      accompanying notes to unaudited consolidated financial
      statements.*




5


**WGNB
      CORP.**


**Consolidated
      Statements of Cash Flows, continued**





**For
      the Three Months Ended March 31, 2006 and 2005**


**(unaudited)**




For
                the Three MonthsEnded
                March 31,2006
            
            2005Supplemental
                disclosure of cash flow information:Cash
                paid during the period for:Interest
            
            $
            3,913,396
            
            
            2,512,456Income
                taxes
            
            $
            380,000
            
            
            10,000Non-cash
                investing and financing activities:Stock-based
                employee compensation expense
            
            $
            31,500
            
            
            -Transfer
                of loans to other real estate
            
            $
            -
            
            
            29,582Change
                in unrealized gains (losses) on securitiesavailable
                for sale, net of tax
            
            $
            (7,409
            )
            
            (436,560
            )Change
                in dividends payable
            
            $
            29,955
            
            
            32,343




6




**WGNB
      Corp.**





**Notes
      to Consolidated Financial Statements**





**(1)
      - Basis of Presentation**





The
      consolidated financial statements include the accounts of WGNB Corp. (the
“Company”) and its wholly-owned subsidiary, West Georgia National Bank (the
“Bank”). All significant inter-company accounts have been eliminated in
      consolidation.





The
      accompanying unaudited interim consolidated financial statements reflect all
      adjustments which, in the opinion of management, are necessary to present fairly
      the Company’s financial position as of March 31, 2006, and the results of its
      operations and its cash flows for the three-month period then ended. All such
      adjustments are normal and recurring in nature. The financial statements
      included herein should be read in conjunction with the consolidated financial
      statements and the related notes and the report of independent accountants
      included in the Company’s 2005 filing on Form 10-K which included the results of
      operations for the years ended December 31, 2005, 2004 and 2003.





**(2)
      - Net Earnings Per Share**





Basic
      earnings per share is based on the weighted average number of common shares
      outstanding during the period while the effects of potential common shares
      outstanding during the period are included in diluted earnings per share. The
      average market price during the period is used to compute equivalent
      shares.





SFAS
      No.
      128, Earnings per share, requires that employee equity share options, non-vested
      shares and similar equity instruments granted to employees be treated as
      potential common shares in computing diluted earnings per share. Diluted
      earnings per share should be based on the actual number of options or shares
      granted and not yet forfeited, unless doing so would be anti-dilutive. The
      Company uses the “treasury stock” method for equity instruments granted in
      share-based payment transactions provided in SFAS 128 to determine diluted
      earnings per share.





Reconciliation
      of the amounts used in the computation of both “basic earnings per share” and
“diluted earnings per share” for the quarters ended March 31, 2006 and March 31,
      2005 are as follows:





For
                the three months ended March 31, 2006Net
                Earnings
            
            Common
                Shares
            
            Earnings
              per
                ShareBasic
                earnings per share
            
            $
            1,815,116
            
            
            3,329,075
            
            $
            0.55Effect
                of dilutive securities - stock options
            
            
            -
            
            
            13,472
            
            
            (0.01
            )Diluted
                earnings per share
            
            $
            1,815,116
            
            
            3,342,547
            
            $
            0.54




For
                the three months ended March 31,
                2005Net
                Earnings
            
            Common
                Shares
            
            Earnings
              per
                ShareBasic
                earnings per share
            
            $
            1,613,971
            
            
            3,324,427
            
            $
            0.49Effect
                of dilutive securities - stock options
            
            
            -
            
            
            18,655
            
            
            (0.01
            )Diluted
                earnings per share
            
            $
            1,613,971
            
            
            3,343,082
            
            $
            0.48





7


**WGNB
      Corp.**





**Notes
      to Consolidated Financial Statements, continued**




**(3)
      - Stock-based Compensation**





SFAS
      No.
      123 (revised 2004) (SFAS No.123 (R)) “Accounting for Stock-Based Compensation”
was adopted by the Company on the required date, January 1, 2006, using the
      modified prospective transition method provided for under the standard. SFAS
      No.
      123 (R) addresses the accounting for share-based payment transactions in which
      the Company receives employee services in exchange for equity instruments of
      the
      Company. SFAS No. 123 (R) requires the Company to recognize as compensation
      expense the “grant date fair value” of stock options granted to employees in the
      statement of earnings using the fair-value-based method. Prior to the adoption
      of SFAS 123 (R), the Company utilized the recognition and measurement principals
      that were previously permissible under Accounting Principles Board Opinion
      No.
      25 (APB 25) “Accounting for Stock Issued to Employees” and related
      interpretations. Under APB 25 no compensation expense was recognized in the
      statement of earnings, since the grant price was equal to the strike price.





The
      following table presents the effect on net earnings and earnings per common
      share for the three months ended March 31, 2005 had the fair value-based method
      as required under SFAS 123(R) been applied:




First
                Quarter2005Net
                earnings (as reported)
            
            $
            1,613,971Stock-based
                employee compensation expense determined under
              the
                fair value based method, net of related tax effects
            
            
            (69,614
            )Pro
                forma net earnings
            
            $
            1,544,357As
                reported:Earnings
                per common share
            
            $
            0.49Diluted
                earnings per common share
            
            $
            0.48Pro
                forma:Earnings
                per common share
            
            $
            0.46Diluted
                earnings per common share
            
            $
            0.46





The
      compensation expense included in the pro forma results was determined based
      on
      the fair value of the option at the time of grant multiplied by the number
      of
      options granted, recognized over the vesting period, net of tax effect.





The
      Company recognized $31,500 of stock-based employee compensation expense during
      the three months ended March 31, 2006 associated with its stock option grants.
      The Company is recognizing the compensation expense for stock option grants
      with
      graded vesting schedules on a straight-line basis over the requisite service
      period of the award as permitted by SFAS No. 123 (R). As of March 31, 2006,
      there was $375,398 of unrecognized compensation cost related to stock option
      grants. The cost is expected to be recognized over the vesting period of
      approximately five years.





The
      grant-date fair value of each option granted during the first quarters of 2006
      and 2005 was $6.70 and $4.44, respectively. The fair value of each option is
      estimated on the date of grant using the Black-Scholes Model. The following
      weighted average assumptions were used for grants in 2006 and 2005:





First
                Quarter
              2006
            
            First
                Quarter
              2005Dividend
                yield
            
            
            2.85
            %
            
            2.84
            %Expected
                volatility
            
            
            13
            %
            
            13
            %Risk-free
                interest rate
            
            
            4.54
            %
            
            4.09
            %Expected
                term
            
            
            10
                years
            
            
            10
                years





8




**WGNB
      Corp.**





**Notes
      to Consolidated Financial Statements, continued**





**(4)
      Contingent Liabilities**





Various
      legal actions and proceedings are pending or are threatened against the Company
      and its subsidiaries, some of which seek relief or damages in amounts that
      are
      substantial. These actions and proceedings arose in the ordinary course of
      the
      Company’s business. After consultation with legal counsel, management believes
      that the aggregate liability, if any, resulting from such pending and threatened
      actions and proceedings will not have a material adverse effect on the Company’s
      financial condition.




9





**Item
      2.**  **Management’s Discussion and Analysis of Financial Condition and Results of
      Operations**





The
      following analysis compares the Company’s results of operations for the three
      month periods ended March 31, 2006 and 2005 and reviews important factors
      affecting the Company’s financial condition at March 31, 2006, compared to
      December 31, 2005. These comments should be read in conjunction with the
      Company’s consolidated financial statements and accompanying notes appearing in
      this Report.





**Cautionary
      Notice Regarding Forward-Looking Statements**





Certain
      of the statements made in this Report and in documents incorporated by reference
      herein, including matters discussed under the caption “Management’s Discussion
      and Analysis of Financial Condition and Results of Operations,” as well as oral
      statements made by the Company or its officers, directors or employees, may
      constitute forward-looking statements within the meaning of Section 21E of
      the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such
      forward-looking statements are based on management’s beliefs, current
      expectations, estimates and projections about the financial services industry,
      the economy and about the Company and the Bank in general. The words “expect,”
“anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” and similar
      expressions are intended to identify such forward-looking statements. Such
      forward-looking statements are not guarantees of future performance and are
      subject to risks, uncertainties and other factors that may cause the actual
      results, performance or achievements of the Company to differ materially from
      historical results or from any results expressed or implied by such
      forward-looking statements. The Company cautions readers that the following
      important factors, among others, could cause the Company’s actual results to
      differ materially from the forward-looking statements contained in this Report:





·  the
      effect of changes in laws and regulations, including federal and state banking
      laws and regulations, with which the Company or the Bank must comply, and the
      associated costs of compliance with such laws and regulations either currently
      or in the future as applicable;





·  the
      effect of changes in accounting policies, standards, guidelines or principles,
      as may be adopted by the regulatory agencies as well as by the Financial
      Accounting Standards Board;





·  the
      effect of changes in the Company’s organization, compensation and benefit plans;





·  the
      effect on the Company’s competitive position within its market area of the
      increasing consolidation within the banking and financial services industries,
      including the increased competition from larger regional and out-of-state
      banking organizations as well as non-bank providers of various financial
      services;





·  the
      effect of changes in interest rates;





·  the
      effect of changes in the business cycle and downturns in local, regional or
      national economies;





·  the
      matters described under Part I, Item 1, “Business - Business Risks” in the
      Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
      2005.





The
      Company cautions that the foregoing list of important factors is not exclusive.
      The Company undertakes no obligation to publicly update or revise any
      forward-looking statements.





**Critical
      Accounting Policies**





The
      Company has established various accounting policies which govern the application
      of accounting principles generally accepted in the United States in the
      preparation of its financial statements. These significant accounting policies
      are described in the notes to the consolidated financial statements filed with
      the Company’s Annual Report on Form 10-K for the year ended December 31, 2005
      (the “2005 Notes”). Certain accounting policies involve significant judgments
      and assumptions by management which have a material impact on the carrying
      value
      of certain assets and liabilities; management considers these accounting
      policies to be critical accounting policies. The judgments and assumptions
      used
      by management are based on historical experience and other factors, which are
      believed to be reasonable under the circumstances. Because of the nature of
      the
      judgments and assumptions made by management, actual results could differ from
      these judgments and estimates which could have a material impact on the carrying
      value of assets and liabilities and the results of operations of the Company.
      All accounting policies are important, and all policies described in the 2005
      Notes should be reviewed for a greater understanding of how the Company’s
      financial performance is recorded and reported.




10





The
      Company believes the allowance for loan losses is a critical accounting policy
      that requires the most significant judgments and estimates used in the
      preparation of the Company’s consolidated financial statements. The allowance
      for loan losses represents management’s estimate of probable loan losses
      inherent in the loan portfolio. Calculation of the allowance for loan losses
      is
      a critical accounting estimate due to the significant judgment, assumptions
      and
      estimates related to the amount and timing of estimated losses, consideration
      of
      current and historical trends and the amount and timing of cash flows related
      to
      impaired loans. Please refer to the section of the Company’s Annual Report on
      10-K for the year ended December 31, 2005 entitled “Balance Sheet Overview -
      Provision and Allowance for Possible Loan and Lease Losses” and Note 1 and Note
      3 to the 2005 Notes for a detailed description of the Company’s estimation
      processes and methodology related to the allowance for loan losses.





**Results
      of Operations**





*Overview*





Net
      earnings for the three months ended March 31, 2006 were $1,815,000, which
      represented an increase of $201,000, or 12.5 percent, when compared to the
      three
      months ended March 31, 2005. Comparing the first quarter of 2006 to the first
      quarter of 2005, the increase in earnings was most effected by the increase
      in
      net interest income. Net interest income increased $728,000, or 15.5 percent,
      comparing the two first quarter periods of 2005 and 2006. This is the most
      significant operating change when comparing the two first quarter periods and
      is
      attributable to increases in market interest rates, balance sheet management
      and, to a lesser extent, continued loan growth. Total non-interest income
      increased by $75,000, or 5.5 percent. The increase in non-interest income is
      attributable to small increases in service charge income ($47,000), an increase
      in mortgage fee income ($15,000) and an increase in other income ($12,000),
      comparing the first quarter of 2006 to the same period in 2005. All the
      increases were attributable to volume increase attributable to growth in the
      customer base of the Bank. Total non-interest expense increased $375,000, or
      10.7 percent, comparing the first quarter of 2006 with that of 2005. Most of
      that increase ($263,000) was attributable to salaries and employee benefits.
      Each of these components is discussed in more detail in the narrative below.
      There were no significant non-recurring items which materially affected the
      financial condition or the net earnings of the Company





*Net
      Interest Income*





Net
      interest income for the Company has continued to increase during 2006 as
      interest rates rise and asset growth remains strong. Additionally, interest
      rates have increased and are expected to increase 25 to 75 basis points through
      the remainder of 2006. The year-to-date earning asset yields have increased
      by
      118 basis points in 2006 (7.77 percent in 2006 compared to 6.59 percent in
      2005), the year-to-date cost of funds has increased by 107 basis points (3.43
      percent in 2006 from 2.36 percent in 2005), and the net interest margin for
      the
      first quarter of 2006 was 4.51 percent, compared to 4.36 percent for the first
      quarter of 2005. The asset yields have been affected by the series of interest
      rate increases imposed by the Federal Reserve Bank. The first quarter 2006
      average yield (exclusive of loan fees) on loans was 7.60 percent compared to
      6.33 percent for the first quarter of 2005. The Federal Reserve Bank has
      increased the discount rate by 200 basis points since March 2005 and asset
      yields have lagged that increase. As assets reprice in response to these
      changes, yields are expected to increase and will eventually “catch-up” with
      market rates.





The
      Bank’s cost of funds has been similarly affected by increased market rates.
      Management believes it has been able to effectively manage the Bank’s cost of
      funds to similar increases in asset yields despite the rapid increase in short
      term rates. This is largely due to strategies implemented by the Bank’s Asset
      and Liability Committee since the market indicated that rates were expected
      to
      rise. Management concentrated its deposit gathering efforts on attracting funds
      with longer maturities, which allowed the Bank to take advantage of the flat
      yield curve (where longer term deposits were priced the same as short term
      deposits). Accordingly, as rates increased, the Bank would, in essence, lock-in
      its cost of funds. Another effective strategy for managing the Bank’s cost of
      funds stems from the fact that approximately 52% of the Bank’s deposits are
      transaction accounts. That is, with the exception of Super NOW accounts, they
      are not contractually tied to increases in the market interest rates. Therefore,
      management has the ability to control the cost of those funds taking into
      account competitive pressures in the market. Management believes it has
      successfully controlled the cost of those funds thereby allowing asset yields
      to
      respond to increases in market interest rates.




11





Management
      recognized early in 2004 that interest rates were beginning to rise and actively
      managed the balance sheet throughout 2004 and 2005 to minimize interest rate
      risk exposure to rising rates. Management sought to become more asset sensitive
      during this period. That is, we sought to accelerate the asset side of the
      balance sheet’s sensitivity to the upward rate cycle, thereby causing the Bank’s
      net interest margin to benefit slightly from rising rates. Management believes
      that it was successful in this pursuit as evidenced by the fact that, comparing
      the first quarter of 2006 (4.51 percent) to the first quarter of 2005 (4.36
      percent), the net interest margin expanded on an average basis by fifteen basis
      points.





In
      addition to management of asset sensitivity, the Bank’s net interest income has
      benefited from an increase in average earning assets. To put this in
      perspective, net interest income increased by $728,000 in the first quarter
      of
      2006 over the first quarter of 2005. Total interest income for the first quarter
      of 2006 increased by $2.39 million, while total interest expense increased
      by
      $1.66 million. Interest earning assets outstanding averaged $502.9 million
      for
      the first quarter of 2006. This compares to average interest earning assets
      outstanding of $437.9 million in the first quarter of 2005. The average interest
      earning asset increase was $65.0 million, or 14.8 percent, since the first
      quarter of 2005. Comparing the first quarter of 2006 to 2005, interest-bearing
      deposits and borrowings have increased by $62.1 million, or 15.0 percent. The
      increased earning asset volume and the increased net interest margin have caused
      the increase in the Bank’s net interest income.





The
      average earning asset mix has shifted from 17 percent investment securities
      and
      83 percent loans as of March 31, 2005, to 15 percent investment securities
      and
      85 percent loans as of March 31, 2006. The Bank’s core business has been lending
      and, as the loan portion of the earning asset mix increases, the net interest
      margin improves since loans carry higher yields than investment securities.
      The
      2006 year-to-date weighted average yield on loans, not including loan fees,
      was
      7.60 percent, compared to 6.33 percent for the same period in 2005. The
      year-to-date average balance of loans has increased by $61 million, or 16.7
      percent, comparing the first quarter ended March 31, 2005 to the same period
      in
      2006. Consequently, most of the earning asset growth has been in total loans.
      Interest income from loans has increased by $2.22 million, or 36.0 percent,
      comparing the two periods ending March 31, 2005 and 2006. As stated above,
      total
      interest income increased by 2.39 million and the increase in interest income
      on
      loans constituted 93 percent of the increase in total interest income.





*Non-Interest
      Income and Expense*





Non-interest
      income increased by $75,000, or 5.5 percent, when comparing the first quarter
      of
      2006 to first quarter of 2005. For the first quarter of 2006, service charges
      on
      deposit accounts increased by $47,000, or 5.1 percent, and mortgage origination
      fees increased by $15,000, or 20.5 percent. The increase in service charge
      income is primarily attributable to an increase in the volume of overdraft
      fees
      on deposit accounts. Mortgage origination volume has finally begun to pick
      up
      after two years of decline. The mortgage origination volume that the Company
      is
      experiencing results from home purchases. Although the increase was not large,
      management is encouraged that it increased instead of declined. For the past
      two
      years, mortgage fee income has steadily declined, because refinance activity
      ceased. Management has attempted to gain a foothold in new and existing home
      financing in our market and increased mortgage fee income is evidence that
      we
      are making progress. Other income increased by $12,000, or 3.5 percent comparing
      the first quarter of 2006 to the first quarter of 2005. There was no one line
      item of note that made up that increase.





When
      comparing total non-interest expense for the three month periods ended March
      31,
      2006 with that of 2005, the Company experienced an increase of $375,000, or
      10.7
      percent. Most of that increase was made up of a $263,000, or 12.5 percent,
      increase in salaries and benefits attributable to staffing two new branch
      locations. The Bank also experienced increases in salaries and other
      compensation for employees resulting from annual raises and incentive bonus
      accruals. The Bank added 17 new staff members since the first quarter of 2005,
      leading to a full time equivalent employee count at March 31, 2006 of 161,
      compared to that as of March 31, 2005 of 144.





In
      2006,
      we plan to open two new branches. Most of the increase in the full time
      equivalent employee count is attributable to the staffing of those two branches.
      On April 10, 2006, we opened our Chapel Hill office in Douglas County which
      resulted in 6 new employees. In addition, we have created a new division in
      the
      Bank, Banco de Progreso. Over the last two years we have focused on serving
      the Spanish-speaking community in Carroll and surrounding counties. We plan
      to
      open the Banco de Progreso (which, translated in English, means “Bank of
      Progress”) in July 2006. However, we have added 8 new employees to staff the
      Banco de Progreso office in order to complete the necessary training and to
      help insure that we are able to manage this new business location.




12





In
      addition, management has acted to strengthen our credit administration
      department by hiring a Chief Credit Officer and a loan review staff person.
      The
      Bank’s loan portfolio has experienced rapid growth over the last five years, and
      management is seeking to enhance its credit administration function in order
      to
      minimize and manage the potential losses in its loan portfolio.





Occupancy
      expense in the first quarter of 2006 increased $14,000, or 2.6 percent, when
      compared to the first quarter of 2005. The increase in occupancy expense was
      attributable primarily to increased depreciation expense due to normal
      investment in the Bank’s facilities. Other operating expense increased
      approximately $98,000, or 11.2 percent, from the first quarter of 2005 to the
      first quarter of 2006. Most of that increase ($84,000) was attributable to
      legal, accounting and other professional fees related to the management
      transition of the resignation of the Bank’s and the Company’s Chief Executive
      Officer. Also included in professional fees were expenses for legal fees in
      connection with the collection of a loan that has been in litigation for the
      past four years.




*Income
      Taxes*





Income
      tax expense for the first three months of each year was $847,000 in 2006, and
      $621,000 in 2005. The effective tax rates for each of the periods ended March
      31, 2006 and 2005 were 31.8 percent and 27.8 percent, respectively. After the
      first quarter of 2006, the Company will have a better estimate of tax credits
      associated with tax advantaged investments and low income housing. The marginal
      tax rate is expected to decline for the remainder of 2006.





*Provision
      and Allowance for Loan Losses*





The
      adequacy of the allowance for loan losses is determined through management’s
      informed judgment concerning the amount of risk inherent in the Bank’s loan and
      lease portfolios. This judgment is based on such factors as the change in levels
      of non-performing and past due loans and leases, historical loan loss
      experience, borrowers’ financial condition, concentration of loans to specific
      borrowers and industries, estimated values of underlying collateral, and current
      and prospective economic conditions. The allowance for loan losses at March
      31,
      2006 was $5.6 million, or 1.31 percent of total loans, compared to $5.3 million,
      or 1.26 percent of total loans, at December 31, 2005. Management believes that
      the allowance for loan losses is adequate to absorb possible loss in the loan
      portfolio.





*Non-Performing
      Assets and Past Due Loans*





Non-performing
      assets, comprised of real estate owned, non-accrual loans and loans for which
      payments are more than 90 days past due, totaled $3.5 million at March 31,
      2006,
      compared to $3.6 million at December 31, 2005. Non-performing assets as a
      percentage of total loans and real estate owned at March 31, 2006 and December
      31, 2005 were 0.82 percent and 0.85 percent, respectively. The amount of
      non-performing assets includes one loan on non-accrual in the amount of $2.1
      million which management expects it will collect in 2006.





The
      Company has a credit administration and loan review function that continually
      monitors selected loans for which general economic conditions or changes within
      a particular industry could cause the borrowers financial difficulties. The
      credit administration and loan review function also identifies loans with higher
      degrees of credit or other risks. The focus of credit administration as well
      as
      management is to maintain a low level of non-performing assets and return
      current non-performing assets to earning status. Management is unaware of any
      known trends, events or uncertainties that will have or that are reasonably
      likely to have a material effect on liquidity, capital resources or
      operations.





**Financial
      Condition**





*Overview*





Total
      assets were $548 million at March 31, 2006, an increase of $24 million, or
      4.6
      percent, from December 31, 2005. During the first quarter of 2006, total loans
      increased $6.5 million, or 1.5 percent, total deposits increased $12.3 million,
      or 2.9 percent, and borrowings increased $10 million, or 23.8 percent. Loan
      demand in the Bank’s market area has remained strong since the beginning of 2004
      and continues in 2006. The Bank has a funding pipeline of over $30 million.
      We
      intend to fund that loan growth with local market deposits and the Federal
      Home
      Loan Bank advances that the Bank borrowed in the first quarter. If loan growth
      exceeds the Bank’s ability to fund with in market deposit growth, management
      intends to fund the growth with wholesale funding in the national certificate
      of
      deposit market.




13





*Assets
      and Funding*





At
      March
      31, 2006, earning assets totaled $519 million, an increase of $16.1 million,
      or
      3.2 percent, from December 31, 2005. The mix of interest earning assets at
      first
      quarter end 2006 is very similar to that of year end 2005. Loans comprised
      83
      percent, investment securities comprised 13 percent, and federal funds comprised
      4 percent of earning assets at March 31, 2006. The Bank is more liquid than
      it
      was as of December 31, 2005, as total loans to total deposits was 97 percent
      and
      99 percent as of March 31, 2006 and December 31, 2005, respectively. Management
      intends to use the proceeds from the Bank’s deposit growth and borrowings from
      the Federal Home Loan Bank to fund the expected loan growth in 2006.





At
      March
      31, 2006, interest-bearing liabilities increased $18.3 million, or 4.3 percent,
      when compared to December 31, 2005. Non-interest bearing demand accounts
      increased by $4.0 million, or 8.4 percent, and interest-bearing demand accounts
      increased by $920,000, or 0.6 percent, and total time deposits increased by
      $7.0
      million, or 3.3 percent. At March 31, 2006, deposits represented 88 percent
      and
      Federal Home Bank advances represented 12 percent of interest-bearing
      liabilities, respectively, compared to 90 percent and 10 percent, respectively,
      as of December 31, 2005.





**Liquidity
      and Capital Resources**





Net
      cash
      provided by operating activities totaled $2.0 million for the three months
      ended
      March 31, 2006. Net cash used by investing activities totaled $2.8 million,
      which consisted of a $6.6 million cash to fund loans offset by $3.8 million
      of
      cash generated from calls and maturities of investment securities, net of
      purchases. Net cash provided by financing activities totaled $21.2 million
      for
      the three months ended March 31, 2006, which primarily consisted of a $12.3
      million increase in deposits and a $10 million increase in borrowings. The
      net
      increase in cash and cash equivalents for the period ended March 31, 2006 was
      $20.4 million.





Total
      stockholders’ equity at March 31, 2006 was 8.9 percent of total assets, down
      from 9.2 percent at December 31, 2005. Total stockholders’ equity increased by
      $705,000 due to an increase in retained earnings of $965,000 and a decrease
      in
      accumulated other comprehensive income of $7,000 attributable to decreased
      unrealized gains on the available-for-sale investment portfolio. There were
      also
      equity transactions in the first quarter that affected Stockholders’ equity.
      During the first quarter of 2006, stockholders’ equity was reduced by $303,000
      for the repurchase of 8,000 of the Company’s shares and increased by $19,000 for
      the exercise of options.





At
      March
      31, 2006, WGNB Corp. was in compliance with various regulatory capital
      requirements administered by federal banking agencies. The following is a table
      representing WGNB Corp.’s consolidated Tier-1, tangible capital, and risk-based
      capital:




**March
                    31, 2006****Actual**
                
                
                
                **Required**
                
                
                
                **Excess****Amount**
                
                **%**
                ****
                **Amount**
                
                **%**
                ****
                **Amount**
                ****
                **%**Total
                    capital (to risk-weighted assets)
                
                $
                54,062
                
                
                11.75
                %
                $
                36,822
                
                
                8.00
                %
                $
                17,240
                
                
                3.75
                %Tier
                    1 capital (to risk-weighted assets)
                
                
                48,539
                
                
                10.55
                %
                
                18,411
                
                
                4.00
                %
                
                30,128
                
                
                6.55
                %Tier
                    1 capital (to average assets)
                
                
                48,539
                
                
                9.11
                %
                
                21,306
                
                
                4.00
                %
                
                27,233
                
                
                5.11
                %
  *Off
      Balance Sheet Risk*





Through
      the operations of the Bank, the Company has made contractual commitments to
      extend credit in the ordinary course of its business activities. These
      commitments are legally binding agreements to lend money to the Bank’s customers
      at predetermined interest rates for a specified period of time. At March 31,
      2006, the Bank had issued commitments to extend credit of $104,972,000 through
      various types of commercial lending arrangements and additional commitments
      through standby letters of credit of $6,253,000. The Bank evaluates each
      customer’s creditworthiness on a case-by-case basis. The amount of collateral
      obtained, if deemed necessary by the Bank upon extension of credit, is based
      on
      its credit evaluation of the borrower. Collateral varies but may include
      accounts receivable, inventory, property, plant and equipment, commercial and
      residential real estate. The Bank manages the credit risk on these commitments
      by subjecting them to normal underwriting and risk management processes. Because
      these commitments generally have fixed expiration dates and many will expire
      without being drawn upon, the total commitment level does not necessarily
      represent future cash requirements. If needed to fund these outstanding
      commitments, the Bank has the ability to liquidate Federal funds sold or
      securities available-for-sale or on a short-term basis to borrow and purchase
      Federal funds from other financial institutions.




14





*Derivative
      Instruments and Hedging Activities*





As
      of
      March 31, 2006, the Company held an interest rate swap, which it entered into
      as
      a means of managing its interest rate risk and accounted for the hedge
      instrument as a fair value hedge. The interest rate swap contract, with a
      notional amount of $30 million, was used to hedge the Bank’s fixed rate interest
      risk related to its borrowings with the Federal Home Loan Bank. Under the
      interest rate swap contract, the Company received a fixed rate of 3.40 percent
      and paid a rate of 90 day LIBOR which was 4.78 percent as of March 31, 2006.
      Management has determined that the swap remains effective through March 31,
      2006





**Item
      3. Quantitative and Qualitative Disclosures About Market Risk**





Market
      risk is the risk of loss from adverse changes in market prices and interest
      rates. The Company’s market risk arises primarily from interest rate risk
      inherent in its lending and deposit-taking activities. The Company has little
      or
      no risk related to trading accounts, commodities or foreign
      exchanges.





Interest
      rate risk, which encompasses price risk, is the exposure of a banking
      organization’s financial condition and earnings ability to adverse movements in
      interest rates. The measurement of market risk associated with financial
      instruments is meaningful only when all related and offsetting on-and
      off-balance sheet transactions are aggregated, and the resulting net positions
      are identified. Disclosures about the fair value of financial instruments as
      of
      December 31, 2005, which reflected changes in market prices and rates, can
      be
      found in the Company’s Annual Report to Stockholders on Form 10-K for the year
      ended December 31, 2005 under the section entitled “Management’s
      Discussion and Analysis of Financial Condition and Results of Operation -
      Asset/Liability Management.”





Management
      actively monitors and manages the Company’s interest rate risk exposure. The
      primary objective in managing interest rate risk is to limit, within established
      guidelines, the adverse impact of changes in interest rates on the Company’s net
      interest income and capital, while adjusting the Company’s asset-liability
      structure to obtain the maximum yield versus cost spread on that structure.
      Management relies primarily on its asset-liability structure to control interest
      rate risk. However, a sudden and substantial increase in interest rates borne
      by
      assets and liabilities do not change at the same speed, to the same extent,
      or
      on the same basis. Management believes that there have been no significant
      changes in the Company’s market risk exposure since December 31, 2005.





**Item
      4. Controls and Procedures**





The
      Company maintains disclosure controls and procedures, as defined in Rule
      13a-15(e) promulgated under the Securities Exchange Act of 1934 (the “Exchange
      Act”), that are designed to ensure that information required to be disclosed in
      the reports that the Company files or submits under the Exchange Act is
      recorded, processed, summarized and reported within the time periods specified
      in the rules and forms of the Securities and Exchange Commission and that such
      information is accumulated and communicated to the Company’s management,
      including its chief executive and chief financial officers, as appropriate,
      to
      allow timely decisions regarding required disclosure. The Company carried out
      an
      evaluation, under the supervision and with the participation of its management,
      including its chief executive and chief financial officers, of the effectiveness
      of the design and operation of its disclosure controls and procedures as of
      the
      end of the period covered by this Report. Based on the evaluation of these
      disclosure controls and procedures, the chief executive and chief financial
      officers of the Company concluded that the Company’s disclosure controls and
      procedures were effective as of the end of the period covered by this
      Report.




15




There
      were no changes in the Company’s internal control over financial reporting
      during the Company’s fiscal quarter ended March 31, 2006 that have materially
      affected, or are reasonably likely to materially effect, the Company’s internal
      control over financial reporting.





**Part
      II - Other Information**





**Item
      1.**  **Legal
      Proceedings**





While
      the
      Company and its subsidiaries are from time to time party to various legal
      proceedings arising from the ordinary course of business, management believes
      that there are no proceedings of material risk threatened or
      pending.





**Item
      1A.**  **Risk
      Factors**





There
      have been no material changes to the risk factors affecting the Company from
      those set forth in the Company’s Annual Report on Form 10-K for the fiscal year
      ended December 31, 2005.





**Item
      2.**  **Unregistered
      Sales of Equity Securities and Use of Proceeds**





(a)  Not
      applicable.





(b)  Not
      applicable





(c)  Issuer
      Purchases of Equity Securities





(a)
                Total Number of Shares Purchased
            (b)
                Average Price Paid per Share
            (c)
                Total Number of Shares Purchased as Part of Publicly Announced Plans
                or
                Programs
            (d)
                Dollar Value of Shares that May Yet Be Purchased Under the Plans
                or
                ProgramsJan
                1, 2006 through
              Jan
                31, 2006
            -
            -
            -
            (1)Feb
                1, 2006 through
              Feb
                28, 2006
            8,000
            37.88
            8,000
            680,923Mar
                1, 2006 through
              Mar
                31, 2006
            -
            -
            -
            680,923Total
            8,000
            37.88
            8,000
            $680,923





(1)
      In
      1996, the Board of Directors approved a Stock Repurchase Plan of up to $2
      million of the Company’s Common Stock. During 2001 and, again in February 2006,
      the Board of Directors approved the repurchase of an additional $1 million
      and
      $500 thousand, respectively, for a total of $3.5 million available for
      repurchase under this Plan. The shares were authorized to be purchased, from
      time to time, in open market transactions or privately negotiated transactions.
      The repurchase program is being affected from time to time, based on our
      evaluation of market conditions and other factors. The Company has used and
      plans to continue to use existing cash to fund the repurchases. All of the
      shares repurchased during the three months ended March 31, 2006 were purchased
      in privately negotiated transactions.





During
      the first quarter of 2006, the Company declared quarterly cash dividends
      amounting to 25.50 cents per share which were paid on April 1, 2006. The
      declaration of future dividends is within the discretion of the Board of
      Directors and will depend, among other things, upon business conditions,
      earnings, the financial condition of the Bank and the Company, and regulatory
      requirements.





**Item
      3.**  **Defaults
      Upon Senior Securities**





Not
      applicable.




16





**Item
      4.**  **Submission
      of Matters to a Vote of Security Holders**





Not
      applicable.





**Item
      5.**  **Other
      Information**





Not
      applicable.





**Item
      6.**  **Exhibits**





(a)  The
      following exhibits are filed as part of this Report:





3.1
            Amended
                and Restated Articles of Incorporation (Incorporated by reference
                to
                Exhibit 3.1 to the Company’s Registration Statement on Form 10-SB filed
                June 14, 2000 (the “Form 10-SB”).





3.2
            Amended
                and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to
                the Form
                10-SB).





4.1
            See
                exhibits 3.1 and 3.2 for provisions of Company’s Articles of Incorporation
                and Bylaws Defining the Rights of
                Shareholders.





4.2
            Specimen
                certificate representing shares of Common Stock (Incorporated by
                reference
                to Exhibit 4.2 to the Form 10-SB).





4.3
            Rights
                Agreement dated as of February 12, 1997 between the Company and SunTrust
                Bank, Atlanta (Incorporated by reference to Exhibit 4.3 to the Form
                10-SB).  10.1
            Separation Agreement and Release dated February
              14, 2006
              among WGNB Corp., West Georgia National Bank and L. Leighton Alston
              (Incorporated by reference to Exhibit 10.23 to the Company’s Annual Report
              on Form 10-K for year ended December 31, 2005).  31.1
            Certification of Chief Executive Officer pursuant
              to
              Section 302 of the Sarbanes-Oxley Act of 2002.  31.2
            Certification of Chief Financial Officer pursuant
              to
              Section 302 of the Sarbanes Oxley Act of 2002.  32.1
            Certification of Chief Executive Officer pursuant
              to
              Section 906 of the Sarbanes-Oxley Act of 2002.  32.2
            Certification of Chief Financial Officer pursuant
              to
              Section 906 of the Sarbanes Oxley Act of
              2002.




17




**SIGNATURES**





In
      accordance with the requirements of the Securities Exchange Act of 1934, the
      Company has caused this Report to be signed on its behalf by the undersigned,
      thereunto duly authorized.




Dated:
      May 12, 2006


WGNB
              CORP.By:
            /s/ H.
              B.
              Lipham, IIIH.
              B. Lipham, IIIInterim
              President and CEO By:
            /s/ Steven
              J.
              HaackSteven
              J. HaackSecretary
                and Treasurer
              Principal
                Financial Officer


18